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SAFARI INVESTMENTS (RSA) LIMITED - Financial Statements for 31 March 2019, Posting of the Annual Report, Notice of AGM and Dividend Declaration

Release Date: 24/06/2019 09:00
Code(s): SAR     PDF:  
 
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Financial Statements for 31 March 2019, Posting of the Annual Report, Notice of AGM and Dividend Declaration

Safari Investments RSA Limited
Registration number: 2000/015002/06
Approved as a REIT by the JSE Limited
JSE share code: SAR
ISIN: ZAE000188280
Republic of South Africa
("Safari" or the "company" or the "group")

The Abridged Consolidated Financial Statements for the year ended 31 March 2019, 
Posting of the Annual Report, Notice of Annual General Meeting and Dividend 
Declaration.

The preparation of the abridged consolidated financial results for the year 
ended 31 March 2019 was prepared under the supervision of the financial 
director, WL Venter (CA(SA)).

2019 Performance Overview
- Income producing properties: 9
- 2,6% vacancy rate
- R143/m2 monthly weighted average gross rental/m2 for retail sector
- R174/m2 monthly weighted average gross rental/m2 for health care sector
- R72/m2 monthly weighted average gross rental/m2 for living sector
- R168/m2 monthly weighted average gross rental/m2 for office sector
- 93% retail sector; 1% health care sector and 6% residential sector; <1% office
sector
- 89% (rentable area) national tenants
- 174 583m2 total rentable area m2 of property portfolio
- R3,2 billion property portfolio value.

Property portfolio
for the year ended 31 March 2019

Name                    Location                                Property type
Shopping centres
Atlyn                   Cnr Phudufufu and Khoza Streets,        Retail
                        Atteridgeville
Mnandi                  Maunde Street, Atteridgeville           Retail
Denlyn                  Cnr Stormvoel and Maphalla Roads,       Retail
                        Mamelodi
Thabong                 Moshoeshoe Street, Sebokeng Unit 10,    Retail
                        Ext 1, Sebokeng
The Victorian           Cnr Voortrekker and Jordaan Streets,    Retail
                        Heidelberg
Platz am Meer           Swakopmund, Namibia (cnr Albatros       Retail  
                        and Tsavorite Streets)
Thornhill               Cnr Veldspaat Street and Munnik         Retail
                        Avenue, Polokwane
Nkomo Village           Cnr Lengau, Thlou, Lepogo and Church    Retail
                        Streets, Atteridgeville
Private day hospital
Soweto                  R558, Protea Glen, Soweto               Healthcare
Stands for development
Sebokeng                Erf 86, 87, 94 & 95 Moshoeshoe
                        Street, Sebokeng
Lynnwood                Cnr Lynnwood and Roderick Roads - 
                        Sussex and Roderick, Lynnwood
Inventory
36 Luxury apartments    Albatros Street, Swakopmund,            Apartments
                        Namibia 

                                               Market 
                                             value as 
                                           attributed 
                                                   by 
                                          independent 
                                               valuer      Rentable   Vacancy
Name                     Region                 R'000       area/m2         %
Shopping centres
Atlyn                   Gauteng               538 300        31 243         0
Mnandi                  Gauteng               136 600         8 717         2
Denlyn                  Gauteng               792 800        34 513         0
Thabong                 Gauteng               530 219        34 530         0
The Victorian           Gauteng               172 000        11 781         9
Platz am Meer           Erongo, Namibia       283 542        21 155        10
Thornhill               Polokwane             205 100        12 359         2
Nkomo Village           Gauteng               331 600        18 906         5
Private day hospital
Soweto                  Gauteng                39 400         1 379         0
Stands for development
Sebokeng                Gauteng                 4 281         5 502       n/a
Lynnwood                Gauteng                41 700                     n/a
Inventory
36 Luxury apartments    Erongo, Namibia       153 438                     n/a
Total                                       3 228 980       174 583



                        Weighted                                   Approximate
                         average                                        age of
                           gross                         Freehold/    building
Name                   rental/m2    Zoning               leasehold       years
Shopping centres
Atlyn                        142    Special - various     Freehold          11
Mnandi                       126    Special - various     Freehold           3
Denlyn                       185    Special - various     Freehold          14
Thabong                      143    Special - various     Freehold          10
The Victorian                136    Special - various     Freehold          19
Platz am Meer                104    Special - various     Freehold           3
Thornhill                    145    Special - various     Freehold          10
Nkomo Village                131    Special - various     Freehold         0,5
Private day hospital
Soweto                       174    Special - various     Freehold         2,5
Stands for development
Sebokeng                     n/a    Special - various     Freehold
Lynnwood                     n/a    Special - various     Freehold
Inventory
36 Luxury apartments         n/a    Special - various


Nature of business
Safari invests in quality income-generating property mainly focused on the
retail sector. There was no material change in the nature of the business during
the financial year.

Events during and subsequent to the reporting period
Events during the financial period
During June 2018, a distribution of 33 cents per share was declared and paid to
shareholders.

At the annual general meeting held on 31 July 2018 all resolutions were passed. 
Mr AE Wentzel and Dr M Minnaar were re-elected as non-executive directors who 
retired by rotation in terms of the memorandum of incorporation and being eligible, 
offered themselves for re-election. Mr CR Roberts and Ms LL Letlape were appointed 
as independent non-executive directors and Mr DC Engelbrecht was appointed as 
an executive director by way of separate resolutions. It was further resolved 
that the directors of the company be authorised, by way of general authority, 
to issue a maximum of 15% of the issued share capital from the authorised but 
unissued shares in the capital of the company for cash. The shareholders also 
passed a non-binding advisory vote on the company's remuneration policy as well 
as the 2018 implementation report on the company's remuneration policy which is 
available for inspection on the company's website.

On 7 September 2018, the board of Safari approved the acquisition of a letting 
enterprise known as Thornhill Shopping Centre ("Thornhill") in Polokwane with 
a gross built area of 13 374m2. Thornhill is a well-established convenient 
neighbourhood retail centre boasting 90% national tenants with sustainable 
growth in trading densities.

On 7 November 2018, Mr FJJ Marais retired as chief executive officer and
Mr DC Engelbrecht was subsequently appointed as the chief executive officer.
Mr FJJ Marais was appointed as the non-executive chairman of the board.

On 13 November 2018, a special general meeting of shareholders was held where 
all special resolutions were passed and shareholders are referred to the SENS 
announcement dated 13 November 2018.

At the board meeting on 14 November 2018, Mr PWL van Niekerk (LLB) was 
appointed as the group company secretary by the board with immediate effect. 
At this board meeting, a hedging policy was adopted by the board and 
shareholders are referred to the business update published on SENS on 
27 March 2019 for further information.

Construction of the Nkomo Village Shopping Centre Phase 1 was completed 
and opened for trade on 22 November 2018. The centre is anchored by 
Pick n Pay and Boxer Superstore and brings other national tenants such 
as McDonald's, Builders Warehouse, Food Lover's Market, The Gym Company 
and Roots Butchery to the Atteridgeville community for the first time.

During December 2018, a distribution of 26 cents per ordinary share was 
declared and paid to shareholders.

On 28 February 2019, the board of directors approved the transaction where 
Safari bought out the property management agreement with Cosmos Management 
CC ("Cosmos"). Shareholders are referred to the SENS announcements dated 
4 March 2019 and 6 March 2019 for further details.

On 28 March 2019, Safari and Fairvest Property Holdings Limited ("Fairvest") 
published a joint SENS announcement regarding a potential friendly merger 
being investigated on an exclusive basis.

Financial results and activities
The operating results and state of affairs of the group are fully set out 
in the consolidated annual financial statements.

The group recorded an operating profit, before investment revenue, fair value 
adjustments and finance costs for the year ended 31 March 2019, of 
R197 271 000 (2018: R183 500 000).

The group's revenue increased by 20% to R299 426 469 compared with the previous 
year's R248 648 458. A weighted average escalation on lease agreements of 
5,16% was achieved for the 2019 financial year. Property expenses as a 
percentage of property revenue was 26% (2018: 25%).

The Safari group's gearing (loan to value) ratio increased from 12% to 24%, 
mainly resulting from the completion of Nkomo Village together with the 
acquisition of Thornhill Shopping Centre.

The fair value of the group's investment property increased by 13% to
R3 075 542 000, refer to note 4 of the consolidated annual financial statements
for detailed disclosure. The income-generating properties were valued on the
discounted cash flow method and are supported by Safari's 2,6% vacancy profile, 
the 86% national tenants' occupation level, a positive lease expiry profile and 
rental escalation achieved through the 2019 financial year. The net asset 
value per share decreased by 12% to 723 cents for the year, from 824 cents in 
the prior year, mainly as a result of the R250 million share-based payment 
liability, refer to note 14 of the consolidated annual financial statements.

Dividends
In terms of REIT legislation, at least 75% of the distributable earnings must 
be distributed in every financial year. During 2019, Safari declared a total
distribution of R183 586 617 (2018: R180 743 384). Refer to note 36 of the 
consolidated annual financial statements for the distribution statement.

Going concern
The directors are of the opinion that the group has adequate financial resources 
to continue its operations for the foreseeable future and accordingly, the 
consolidated annual financial statements have been prepared on a going-concern 
basis.

The group is in a sound financial position and has access to sufficient borrowing 
facilities to meet its foreseeable cash requirements for operational activities 
and capital commitments as disclosed in note 32 of the consolidated annual 
financial statements. The directors are not aware of any material new changes 
that may have an adverse impact on the company, nor of any material 
non-compliance with statutory or regulatory requirements nor of any pending 
changes to legislation which may affect the group.

Litigation statement
In terms of section 7.D.11 of the JSE Listings Requirements, the directors are
not aware of any legal or arbitration procedures that are pending or threatening, 
that might have had, in the previous 12 months, a material effect on the 
group's financial position.

Auditor
Deloitte & Touche was appointed as auditor for the group on 2 September 2015. 
During the 2019 financial year, Mr Johan van der Walt was the designated audit 
partner for the Safari group.

Abridged consolidated statement of financial position 
as at 31 March 2019
                                                           2019            2018
                                                          R'000           R'000
Assets
Non-current assets
Property, plant and equipment                                23               - 
Investment property                                   3 009 004       2 638 538
Fair value of investment property                     3 075 542       2 681 628
Operating lease asset                                   (66 538)        (43 090) 
Loans to shareholders                                    45 883          45 166
Operating lease asset                                    64 322          42 350
Deferred tax                                             23 743          16 908
                                                      3 142 975       2 742 962
Current assets
Inventories                                             153 438         169 649
Loans to shareholders                                     5 465           8 149
Trade and other receivables                               9 185          15 331
Operating lease asset                                     2 215             740
Cash and cash equivalents                                 7 233           2 948
                                                        177 536         196 817
Total assets                                          3 320 511       2 939 779
Equity and liabilities
Equity
Stated capital                                        1 828 902       2 087 928
Share-based payment reserve                                   -          49 800
Retained income                                         417 245         427 053
                                                      2 246 147       2 564 781
Liabilities
Non-current liabilities
Interest-bearing borrowings                             783 661         335 245
Deferred tax                                             16 921          18 535
                                                        800 582         353 780
Current liabilities
Trade and other payables                                 23 215          20 655
Interest-bearing borrowings                                 567             563
Share-based payment liability                           250 000               -
                                                        273 782          21 218
Total liabilities                                     1 074 364         374 998
Total equity and liabilities                          3 320 511       2 939 779


Abridged consolidated statement of profit or loss and other comprehensive income
for the year ended 31 March 2019
                                                           2019            2018
                                                          R'000           R'000
Revenue                                                 299 427         248 649
Property revenue                                        275 979         240 999
Operating lease                                          23 448           7 650
Other income                                              2 167           5 743
Operating expenses                                     (104 323)        (70 892) 
Operating profit                                        197 271         183 500
Investment income                                         5 907           3 446
Fair value adjustments                                  (32 077)         15 186
Gross fair value adjustments                             (8 629)         22 836
Operating lease                                         (23 448)         (7 650) 
Finance costs                                           (37 200)        (37 431) 
Impairment of inventory                                 (16 210)         (5 035) 
Share-based payment expense                                   -         (49 800) 
Fair value loss on hedging instruments                   (2 005)              - 
Profit before taxation                                  115 686         109 866
Taxation                                                  8 293          21 477
Profit for the year                                     123 979         131 343
Other comprehensive income                                    -               - 
Total comprehensive income for the year                 123 979         131 343
Basic earnings per share (cents)                             48              57
Diluted earnings per share (cents)                           40              50


Abridged consolidated statement of changes in equity 
for the year ended 31 March 2019
                                               Share-
                                                based
                                              reserve
                                    Stated    payment     Retained        Total
                                   capital    reserve       income       equity
                                     R'000      R'000        R'000        R'000
Balance as at 1 April 2017       1 187 088          -      476 453    1 663 541
Profit for the year                      -          -      131 343      131 343
Other comprehensive income               -          -            -            -
Total comprehensive
income for the year                      -          -      131 343      131 343
Shares issued through
capitalisation dividend              2 853          -            -        2 853
Private placement                  152 000          -            -      152 000
Private placement                  756 600          -            -      756 600
Capital raising fee on shares 
paid for and issued in 
the current period                 (10 613)         -            -      (10 613)
Share-based payment                      -     49 800            -      (49 800) 
Reit distribution paid                   -          -     (180 743)    (180 743) 
Total contributions by and 
distributions to owners of 
company recognised directly 
in equity                          900 840     49 800     (180 743)     769 897
Balance as at 1 April 2018       2 087 928     49 800      427 053    2 564 781
Profit for the year                      -          -      123 980      123 980
Other comprehensive income               -          -            -            -
Total comprehensive
income for the year                      -          -      123 980      123 980
Share-based payment                 (7 356)   (49 800)      49 800       (7 356) 
Share buy-back                      (1 670)         -            -       (1 670)
Share-based payment liability     (250 000)         -            -     (250 000)
REIT distribution paid                   -          -     (183 587)    (183 587)
Total contributions by and 
distributions to owners of 
company recognised directly 
in equity                         (259 026)   (49 800)    (133 787)    (442 613)
Balance as at 31 March 2019      1 828 902          -      417 246    2 246 147


Abridged consolidated statement of cash flows 
for the year ended 31 March 2019
                                                           2019            2018
                                                          R'000           R'000
Net cash used in operating activities
Cash generated from operations                          182 531         179 844
Investment income                                         5 907           3 445
Finance costs                                           (37 200)        (37 434) 
Reit distribution paid                                 (183 587)       (177 891) 
Tax (paid)/received                                        (156)          1 638
Net cash used in operating activities                   (32 505)        (30 398)
Cash used in investing activities
Purchase of property, plant and equipment                   (24)              - 
Purchase and development of investment property        (402 543)       (201 802)
Net cash used in investing activities                  (402 567)       (201 802)
Cash flows from financing activities
Proceeds on share issue                                       -         897 988
Reduction of share capital or buy-back of shares         (9 026)              - 
Proceeds from interest-bearing borrowings             1 057 491         447 970
Repayment of interest-bearing borrowings               (611 076)     (1 016 171) 
Proceeds from bank overdraft                                  -          72 900
Repayment of bank overdraft                                   -         (96 357) 
Repayment/(advance) on shareholders' loan                 1 968         (53 316)
Net cash from financing activities                      439 357         253 014
Total cash movement for the year                          4 285          20 814
Cash and cash equivalents at the beginning 
of the year                                               2 948         (17 866)
Total cash and cash equivalents at the end 
of the year                                               7 233           2 948


Segmental reporting 2019
The group classifies the following main segments, which is consistent with the 
way the group reports internally: Atteridgeville, Mamelodi, Sebokeng, Polokwane; 
Heidelberg and Namibia. Head office, Lynnwood and Soweto is regarded as 
reconciling.

Segment results and net assets, include items that can be directly attributable 
to a segment as well as those that can be allocated on a reasonable basis.

                           Atteridge-
                                ville     Mamelodi     Sebokeng      Heidelberg
                                R'000        R'000        R'000           R'000
As at 31 March 2019
Turnover (external)            86 892       79 787       65 665          21 557
Reportable segment profit 
before investment
revenue, fair value
adjustments and finance
costs                          70 727       67 134       44 366          14 650
Unallocated reportable 
segment profit before 
investment revenue, fair 
value adjustments and
finance costs                       -            -            -               -
Profit before investment 
revenue, fair value 
adjustments and finance
costs                          70 727        67 134      44 366          14 650
Segment assets and 
liabilities
Segment assets              1 007 076       793 136     534 791         171 966
Unallocated assets                  -             -           -               - 
Total assets                1 007 076       793 136     534 791         171 966
Segment liabilities             6 135         3 109       4 097             566
Unallocated liabilities             -             -           -               - 
Interest-bearing
borrowings                          -             -           -               -
Total liabilities               6 135         3 109       4 097             566
Other segment items
Interest revenue
(external)                          -             -           -              (4)
Unallocated interest
revenue                             -             -           -               - 
Investment revenue                  -             -           -              (4)
Fair value adjustments        (15 418)       (3 916)     25 604           5 438
Interest expense                    -             -           -               -
Unallocated interest
expense                             -             -           -               - 
Finance costs                       -             -           -               -

                                                       Reconci-
                              Limpopo      Namibia      liation           Total
                                R'000        R'000        R'000           R'000
As at 31 March 2019
Turnover (external)            10 751       30 458        4 316         299 427
Reportable segment profit 
before investment revenue, 
fair value adjustments and 
finance costs                   9 172       19 372            -         225 421
Unallocated reportable 
segment profit before 
investment revenue, fair 
value adjustments and
finance costs                       -            -      (28 150)        (28 150)
Profit before investment 
revenue, fair value 
adjustments and finance
costs                           9 172       19 372      (28 150)        197 271
Segment assets and 
liabilities
Segment assets                205 568      442 697            -       3 155 235
Unallocated assets                  -            -      165 276         165 276
Total assets                  205 568      442 697      165 276       3 320 511
Segment liabilities             2 212        4 022            -          20 141
Unallocated liabilities             -            -      269 996         269 996
Interest-bearing borrowings         -            -      784 228         784 228
Total liabilities               2 212        4 022    1 054 224       1 074 364
Other segment items
Interest revenue
(external)                         12          324            -             333
Unallocated interest revenue        -            -        5 574           5 574
Investment revenue                 12          324        5 574           5 907
Fair value adjustments         30 319      (56 512)       5 856          (8 629)
Interest expense                    -            -            -               -
Unallocated interest expense        -            -      (37 200)        (37 200)
Finance costs                       -            -      (37 200)        (37 200)

                           Atteridge-
                                ville     Mamelodi     Sebokeng      Heidelberg
                                R'000        R'000        R'000           R'000
As at 31 March 2018
Turnover (external)            67 367       72 519       51 290          20 726
Reportable segment profit 
before investment revenue, 
fair value adjustments 
and finance costs              54 291       61 481       33 035          15 278
Unallocated reportable 
segment profit before 
investment revenue, fair 
value adjustments and
finance costs                       -            -            -               -
Profit before investment 
revenue, fair value 
adjustments and finance costs       -            -            -               -
Segment assets and 
liabilities
Segment assets                827 073      781 742      495 768         169 361
Unallocated assets                  -            -            -               - 
Total assets                  827 073      781 742      495 768         169 361
Segment liabilities             6 969        3 703        3 761             509
Unallocated liabilities             -            -            -               - 
Interest-bearing borrowings         -            -            -               -
Total liabilities               6 969        3 703        3 761             509
Other segment items
Interest revenue (external)        15           10           15               -
Unallocated interest revenue        -            -            -               -
Investment revenue                 15           10           15               - 
Fair value adjustments         46 418       95 866      (11 972)          9 325
Interest expense                    -            -            -               -
Unallocated interest expense        -            -            -               -
Finance costs                       -            -            -               -

                                                       Reconci-
                                           Namibia      liation           Total
                                             R'000        R'000           R'000
As at 31 March 2018
Turnover (external)                         32 346            -         248 649
Reportable segment profit before 
investment revenue, fair value
adjustments and finance costs               24 418            -               -
Unallocated reportable segment 
profit before investment revenue, 
fair value adjustments and 
finance costs                                    -        5 003           5 003
Profit before investment revenue, fair
value adjustments and finance costs              -            -         183 500
Segment assets and liabilities
Segment assets                             510 146            -       2 784 089
Unallocated assets                               -      155 689         155 689
Total assets                               510 146      155 689       2 939 779
Segment liabilities                          2 695            -          17 637
Unallocated liabilities                          -       21 552          21 552
Interest-bearing borrowings                      -      335 808         335 808
Total liabilities                            2 695      357 360         374 998
Other segment items
Interest revenue (external)                      -            -              39
Unallocated interest revenue                     -        3 406           3 406
Investment revenue                               -        3 406           3 445
Fair value adjustments                   (118 501)        1 700          22 836
Interest expense                             2 953            -           2 953
Unallocated interest expense                     -       34 480          34 480
Finance costs                                2 953       34 480          37 434


Earnings per share for the year ended 31 March 2019
                                                           2019            2018
                                                          R'000           R'000
Earnings used in the calculation of basic
earnings per share (profit after tax)                   123 979         131 343
Ordinary shares in issue at year end                    257 826         251 975
Weighted average number of ordinary shares              258 128         230 253
Headline earnings                                       132 608         108 507
Diluted weighted average number of shares               311 128         265 293
Basic earnings per share (cents)                          48,03           57,04
Diluted earnings per share (cents)                        39,85           49,51
Basic headline earnings per share (cents)                 51,37           47,13
Diluted headline earnings per share (cents)               42,62           40,90
Headline earnings reconciliation
Basic earnings (profit after tax)                       123 979         131 343
Gains and losses from the adjustment to fair
value of non-current assets                               8 629         (22 836)
                                                        132 608         108 507


Net asset value per share for the year ended 31 March 2019
                                                           2019            2018
                                                          R'000           R'000
Total assets                                          3 320 511       2 939 779
Total liabilities                                    (1 074 364)       (374 998)
                                                      2 246 147       2 564 781
Ordinary shares in issue                                310 826         311 186
Net asset value per share (cents)                           723             824
Tangible net asset value (cents)                            723             824


REIT distribution paid
                                                           2019            2018
                                                          R'000           R'000
Prior year final distribution (33 cents per
share) (2018: 34 cents per share)                      (102 691)        (68 975)
Capitalisation of distribution 
(2018: R7,60 per share)                                       -          (2 853)
Interim distribution (26 cents per share)
(2018: 35 cents per share)                              (80 895)       (108 915)
                                                       (183 587)       (180 743)


Refer to the distribution statement in note 36 of the consolidated annual 
financial statements.

2018: To determine distributable earnings per share for the distribution period
1 April 2017 to 31 March 2018, with the final distribution for this distribution
period declared for distribution in July 2018, antecedent dividends resulting
from new share issues in July 2017 and August 2017 were included in distributable 
earnings and the weighted average number of shares in issue was used to determine 
the distribution per share.

R177 890 822 was paid in cash to shareholders, the remaining balance of
R2 852 561 was settled by means of a capitalisation dividend.

Distribution statement
                                                           2019            2018
                                                          R'000           R'000
Revenue (including recoveries)                          301 594         254 392
Lease-smoothing effect                                  (23 448)         (7 650) 
Expenses                                               (104 323)        (70 892) 
Net interest                                            (31 293)        (33 985) 
Interest income                                           5 907           3 446
Interest expense                                        (37 200)        (37 431) 
Antecedent dividends                                          -          31 360
Transaction costs expensed                               13 246               -
Distributable earnings                                  155 776         173 225
Actual number of shares sharing in dividend         310 826 016     311 185 616
Weighted number of shares in issue                  311 128 090     265 292 803
Distributable income per share (cents)                       50              65
Distribution per share from capital reserves (cents)          -               3
Distribution per share (cents)                               50              68

The decrease in distribution per share is attributed to:
For FY2018, distributable earnings included antecedent dividends (resulting from
the 119 552 633 shares issued at R7,60 during FY2018) and distribution per share 
was calculated using the weighted average number of shares in issue. In the 
current period there is no adjustment for antecedent dividends and distribution 
per share is calculated using the number of shares in issue at 31 March 2019.

The continued weaker than expected performance of the Platz Am Meer shopping 
centre in the current period and the delay, due to finalisation of regulatory 
processes, in the sale of the residential units at the Platz Am Meer development 
in Swakopmund.

The challenging local retail environment putting current period rental renewals 
and escalations under pressure.

As previously disclosed, Southern Palace defaulted on the R50 million equity loan 
from Sanlam during the current period which resulted in a cross-default on the 
R455 million senior loan. Guarantee fees and additional interest expense resulting 
from funding the interest shortfall from December 2018 amounting to R2,69 million 
paid on behalf of Southern Palace are deemed to not be recoverable and have been 
expensed in FY2019. It should be noted that there is a reversionary pledge and 
cession agreement together with a Southern Palace Holdco guarantee in place which 
will result in Safari holding a pledge over the 53 million Safari shares of 
Southern Palace should Sanlam make a further call on the Safari guarantee for 
full settlement of Southern Palace's outstanding obligations. This will result 
in a legal claim against Southern Palace for the full amount paid by Safari on 
account of Southern Palace’s obligations under the guarantees issued as set 
out above.

To determine the distributable income for the current distribution period the 
cost related to the internalisation of the property management function (refer 
to note 30 of the consolidated annual financial statements) and the setup cost 
of the security SPV and new facilities (refer to note 13 of the consolidated annual 
financial statements) have been carved out as transaction cost in the distribution 
statement (refer to note 36 of the consolidated annual financial statements).

Basis of preparation
The abridged consolidated financial statements are prepared in accordance with
the requirements of the JSE Limited Listings Requirements for abridged reports
and the requirements of the Companies Act 71 of 2008 of South Africa, as
amended. The JSE Listings Requirements require abridged reports to be prepared 
in accordance with the framework concepts and the measurement and recognition 
requirements of International Financial Reporting Standards (IFRS), the 
presentation and disclosure requirements of IAS 34 - Interim Financial Reporting, 
the SAICA Financial Reporting Guides as issued by the Accounting Practices 
Committee and Financial Reporting Pronouncements as issued by Financial Reporting 
Standards Council and the Companies Act 71 of 2008.
 
Explanatory notes to the abridged consolidated statement of financial position
and abridged consolidated statement of comprehensive income for the year ended
31 March 2019:

1. It is the Group's policy to have the investment property portfolio valued 
on an annual basis by an independent valuer. The valuation of investment property 
(except for the property valuations based on the direct comparable method as 
detailed below) totalling R3 021 700 000 (2018: R2 411 606 190 excluding Nkomo 
Village) was based on the discounted cash flow method.

The valuation of investment property (Erf 68 of the subsidiary's property and 
the Lynnwood property), totalling R53 841 500(2018: R239 869 622 included 
Nkomo Village) was based on the direct comparable method, plus development cost. 
This method was used as the erven identified above are stands purchased during 
2013, which are not yet income generating (not yet generating cash flow).

These valuations are considered to be Level 3 on the fair value hierarchy as 
per IFRS 13 Fair Value Measurement. There have been no movements of inputs between 
fair value hierarchy levels nor have there been any changes in the methods of 
valuation as mentioned above. If the valuer were to increase both the 
capitalisation and discount rates by 0,50%, the total valuation would decrease
by R152 500 000. If the valuer were to decrease both the capitalisation and
discount rates by 0,50%, the total valuation would increase by R170 800 000.

If the valuer were to increase the long-term vacancy provision by 1,00%, the 
total valuation would decrease by R28 000 000. If the valuer were to decrease 
the long-term vacancy provision by 1,00% the total valuation would increase 
by R28 300 000. The 17% increase in the value of investment property since 
31 March 2018 is mainly due to the completion of the Nkomo Village shopping 
centre in Atteridgeville and the acquisition of Thornhill shopping centre in 
Polokwane. The construction and acquisition costs are financed by 
interest-bearing borrowings.

2. Most of Safari's current lease agreements are in the first half of the lease 
term. The average annualised property yield for the income-generating property 
portfolio based on market values as at 1 April 2018 is 7,6% for the 2019 
financial year. Included in revenue is gross rent, solar income and turnover 
rent for all income-generating properties and all property expenses have been 
deducted.

3. The 36 luxury upmarket apartments are available for sale in the ordinary 
course of business. The apartments were impaired by R16,2 million in the 
current financial year.

4. During the course of the year Safari repurchased 359 597 shares in terms 
of its general authority at an average price per share of R4,44. The shares 
were subsequently cancelled.

5. In the interim results for the six months ending 30 September 2018, it 
was disclosed that the cross default triggered on the senior facility 
(Southern Palace Capital Proprietary Limited ("Southern Palace") share 
subscription transaction) where Safari is the guarantor for the interest 
and capital portions of the facility provided to Southern Palace for the 
purchase of Safari shares during August 2017 was rectified through the sale 
of 13 million Safari shares held under pledge by Sanlam Life Insurance 
Limited (acting through its Sanlam Capital Markets Division) Sanlam thus 
currently has a pledge over the remaining 53 million shares together 
with the guarantee provided by Safari as mentioned above.

With the remaining 53 million shares, the December 2018 distribution was 
not sufficient to service the interest on the Sanlam facility and Sanlam 
subsequently called on the Safari guarantee for the R7 356 577 shortfall. 
This amount paid by Safari increased Safari's debt facility and was posted 
against equity (stated capital) due to the hybrid nature of the transaction 
(cash settled vs equity settled).

In order to meet the required covenants as stipulated in the Sanlam facility 
agreement, Sanlam intends to call on Safari for a portion of the guarantee 
to the amount of R250 million, as per management's best estimate. A calculation 
was done to determine the value of the liability to be recognised in our 
2019 financial results, utilising a discounted cash flow model based on key
assumptions including the remaining term of the loan, future expected
distributions and share price. The 53 million Safari shares are currently 
pledged to Sanlam and together with the reversionary pledge and cession 
agreement in place, these shares to be pledged to Safari should Sanlam make 
a further call on the Safari guarantee for full settlement of Southern Palace's 
outstanding obligations. This will result in a legal claim against Southern 
Palace for the full amount paid by Safari on account of Southern Palace's 
obligations under the guarantees issued as set out above.

6. Trade and other receivables fluctuated between the comparative periods, 
mainly due to the Value Added Tax ("VAT") receivable and the raising of 
prepaid expense which relates to insurance costs. Allowance for credit 
losses were also raised in terms of IFRS 9, adopted in the current 
financial year.

Trade and other payables consists of tenant deposits held, income 
received in advance, accrued expenses and VAT payable to the Receiver 
of Revenue in Namibia for the financial period under review.

7. During the financial year, Safari successfully implemented a Security 
SPV whereby bonds have been registered over most of Safari's investment 
properties in the security SPV structure to provide pooled security to 
lenders. The structure is regulated by a Common Terms Agreement ("CTA"), 
cession of security, counter indemnity agreements as well as debt
guarantees. Absa is currently Safari's sole financier.

Secured loans:
Facility A: R300 000 000 accruing interest at the three-month JIBAR rate 
plus 1,75%
Facility B: R200 000 000 accruing interest at the three-month JIBAR rate 
plus 1,95%
Facilities C&D: R900 000 000 accruing interest at the prime bank overdraft 
rate less 1,05%
(Prime: 10,25% (2018: 10,00%) at year end of which R250 000 000 is an Absa 
guarantee relating to the Southern Palace Capital Proprietary Limited. 
Secured by certain investment property as per note 4 of the integrated 
consolidated annual financial statements.

8. The property revenue increased by 15% compared with the previous year. 
The increase is a result of annual rental escalations and the fact that 
Nkomo Village and Thornhill shopping centre generated rental income for 
a portion of the current financial period.

9. Property expenses as a percentage of property revenue was 26% compared 
to 25% in the previous year's results. Stringent budgeting and continuous 
monitoring of expenses remain a focus area for management.

10. The deferred tax asset for Namibia is a result of the downward fair 
valuation of the Platz am Meer property. Management's judgement is that the 
current economic climate together with certain property-specific matters, 
which are being addressed, resulted in the downward valuation and should 
be reversed once there is a turn-around. The valuation of the asset will 
be assessed at each reporting period.

Financial statements
The consolidated financial statements for the year have been audited by 
Deloitte & Touche and an unmodified report issued, and is available for 
inspection at the group's registered office or in electronic format on 
the website: www.safari-investments.com.

The abridged consolidated financial statements are extracted from the 
audited financial information but are not themselves audited. Information 
included under the headings "2019 Performance overview" and "Director's 
report" has not been audited or reviewed. Shareholders are advised that 
in order to obtain a full understanding of the nature of the auditors' 
engagement they should obtain a copy of the report with accompanying 
financial statements from the group's registered offices. The directors 
take full responsibility for the preparation of the abridged results 
and all financial information has been correctly extracted from the 
underlying annual financial statements.

The consolidated annual financial statements were approved by the Board of
Directors on 19 June 2019 and published on 24 June 2019.

New standards and interpretations
The accounting policies of the group have been applied consistently to 
the policies as presented in the consolidated financial statements for 
the year ended 31 March 2018 save for the adoption of new and amended 
standards as set out below:
- IFRS 9 Financial Instruments; and
- IFRS 15 Revenue from Contracts with Customers.

The adoption of IFRS 9 and IFRS 15 had no material impact on the results.
 
Events subsequent to the reporting period Safari entered into a 
non-cancellable lease agreement with Wealthgate Investments 45 (Pty) 
Ltd for the corporate head office of Safari. The lease agreement 
commenced on 1 May 2019 and is for a duration of five years. This
lease agreement will result in minimum lease payments over the next 
five years totaling R6,3 million. Based on our assessment, this will 
not materially impact the financial statements. This amount is also 
management's best estimate of the impact in adopting IFRS 16 Leases 
in the 2020 financial year.

On 28 May 2019 the board accepted the resignation tendered by 
Mr FJJ Marais. Dr JP Snyman, a current independent non-executive 
director and former chairman of Safari, was reappointed as chairman 
of the company with immediate effect. The board would like to thank 
Mr Marais for his valuable contribution to the company and wishes 
him well in his retirement.

Shareholders are referred to note 14 of the annual financial statements 
with regards to the Southern Palace transaction and are advised that 
the board entered into further agreements whereby the transaction was 
restructured as follows:
A portion of the senior facility amounting to approximately 
R250 million will be settled by Safari which will result in a claim 
by Safari against Southern Palace; and
Amended the reversionary pledge and cession in security agreement given 
by Southern Palace in favour of Safari to include the additional amounts 
owing to Safari and, in addition, entered into a guarantee and pledge 
and cession in security agreement by Southern Palace Holdco in favour 
of Safari  in order to secure Safari's position with regards to, 
amongst other things, the aforementioned claim.

Matters approved by the board at the board meeting held on 19 June 2019:
A final cash distribution of 24 cents per Safari share and will be paid 
to shareholders during July 2019; and
Two small capital projects amounting to R7.1 million relating to the 
reconfiguration and substitution of Edgars at Atlyn and an increased 
budget for the filling station at Nkomo Village.

The directors are not aware of any other material reportable events 
which occurred during and subsequent to the reporting period.

Related-party transactions
All related-party transactions are as per approved agreements.

Cosmos Management CC (Cosmos) provided bookkeeping and property portfolio 
management services to Safari and is a related party due to the common 
directorship. The services rendered by Cosmos amounted to R18,8 million 
(2018: R6,9 million). Included in the current year figure is the R10,3 million 
internalisation of the management function transaction.

Safari Retail Proprietary Limited (Retail) provided marketing and letting 
service for existing centres to Safari and is a related party due to the 
common directorship. The services rendered by Retail amounted to 
R2,7 million (2018: R1,3 million).

Board commentary

Profile
Safari Investments RSA Limited (Safari), with a total asset base of
R3,32 billion, is a retail-focused Real Estate Investment Trust (REIT) 
listed on the Johannesburg Stock Exchange Limited (JSE) main board under 
the property sector.

Safari invests in quality income-generating property; revenue is generated 
through sustainable rental income. There were no changes to the nature of 
the business during the financial period under review.

Property portfolio
The property portfolio consists of 9 properties. Eight of the properties are
established retail centres, of which four are serving as regionals in their 
areas. The Soweto Day Hospital, operational since January 2016, also forms 
part of the Safari property portfolio. The above-mentioned properties are 
the income-generating assets in the Safari portfolio. These include 
(rentable area) Denlyn in Mamelodi (34 513m2); Atlyn (31 243m2), Nkomo 
Village (18 906m2) and Mnandi (8 717m2) in Atteridgeville; Thabong in 
Sebokeng (34 530m2); The Victorian in Heidelberg (11 781m2); Platz am Meer 
in Swakopmund (21 155m2); Thornhill in Polokwane (12 359m2) and the 
Soweto Day Hospital (1 379m2). The retail centres are anchored by national 
retailers such as Shoprite/Checkers, Super Spar, Boxer and Pick n Pay. 
Safari’s current rental portfolio is 99% retail based.

The luxury apartments that forms part of Platz am Meer in Swakopmund is 
currently being marketed on an open mandate. The sales of the apartments 
are delayed due to the finalisation of regulatory processes.

Letting activity
Safari's vacancy factor in its portfolio as at 31 March 2019 was 2,6% (2018: 2%)
of the total income-generating retail space which consisted of 86% (2018: 88%)
national tenants.

Prospects
The development and relocations as detailed above ensures that Safari will
maintain its attractive portfolio growth. Above-inflation increases in utility
cost and continued financial market volatility are expected to continue. The
Board is committed to maximising the rental income streams with the proactive
letting strategy focused on national tenants, and minimising the operating 
expenditure. The Board will focus on opportunities in order to achieve
sustainable long-term, recurring distributable earnings. Any forecast in the 
results has not been reviewed or reported on by the independent external 
auditors and is the responsibility of the Board.

Dividend declaration
Shareholders are advised that the directors of Safari have approved and 
declared a final gross cash distribution of 24 cents per share for the period 
ended 31 March 2019 from income reserves.

Shareholders will not be able to elect to reinvest the cash distribution in 
return for ordinary shares.

Salient dates and times
The following salient dates and times are applicable to the interim dividend:

Last day to trade cum dividend distribution         Tuesday,9 July 2019
Shares trade ex dividend distribution               Wednesday, 10 July 2019
Record date                                         Friday, 12 July 2019
Payment date                                        Monday, 15 July 2019

Notes:
Shares may not be dematerialised or rematerialised between commencement of trade
on Wednesday, 10 July 2019 and the close of trade on Friday, 12 July 2019, both 
days inclusive.

Tax implications
In accordance with Safari's status as a Real Estate Investment Trust ("REIT"),
shareholders are advised that the dividend meets the requirements of a 
"qualifying distribution" for the purposes of section 25BB of the Income Tax 
Act, No 58 of 1962 ("Income Tax Act"). The dividends on the shares will be 
deemed to be dividends for South African tax purposes in terms of section 25BB 
of the Income Tax Act.

Tax implications for South African resident shareholders
Dividends received by or accrued to South African tax residents must be included
in the gross income of such shareholders and will not be exempt from income tax
in terms of the exclusion to the general dividend exemption contained in section
10(1)(k)(i) (aa) of the Income Tax Act because they are dividends distributed 
by a REIT. These dividends are however exempt from dividend withholding tax 
("Dividend Tax") in the hands of South African resident shareholders provided 
that the South African resident shareholders have provided to the CSDP or
broker, as the case may be, in respect of uncertificated shares, or the company,
in respect of certificated shares, a DTD(EX) (Dividend Tax: Declaration and 
undertaking to be made by the beneficial owner of a share) form to prove their 
status as South African residents.

If resident shareholders have not submitted the abovementioned documentation 
to confirm their status as South African residents, they are advised to 
contact their CSDP, or broker, as the case may be, to arrange for the documents 
to be submitted prior to the payment of the dividend.

Tax implications for non-resident shareholders
Dividends received by non-resident shareholders from a REIT will not be taxable 
as income and instead will be treated as ordinary dividends which are exempt 
from income tax in terms of the general dividend exemption in section
10(1)(k)(i) of the Income Tax Act. With effect from 1 January 2014, any dividend 
received by a non-resident from a REIT will be subject to Dividend Tax at 20%,
unless the rate is reduced in terms of any applicable agreement for the 
avoidance of double taxation ("DTA") between South Africa and the country of 
residence of the non-resident shareholder. Assuming Dividend Tax will be withheld 
at a rate of 20%, the net distribution amount due to non-resident shareholders 
is 19,2 cents per share. A reduced dividend withholding rate in terms of the 
applicable DTA may only be relied on if the non-resident shareholder has 
provided the following forms to their CSDP or broker, as the case may be, 
in respect of uncertificated shares, or the company, in respect of 
certificated shares:
- a declaration that the dividend is subject to a reduced rate as a result 
of the application of a DTA; and
- a written undertaking to inform the CSDP, broker or the company, as the 
case may be, should the circumstances affecting the reduced rate change or 
the beneficial owner cease to be the beneficial owner, both in the form 
prescribed by the Commissioner for the South African Revenue Service.

If applicable, non-resident shareholders are advised to contact the CSDP, 
broker or the company, as the case may be, to arrange for the abovementioned 
documents to be submitted prior to payment of the dividend if such documents 
have not already been submitted.

Other information
- The ordinary issued share capital of Safari is 310 826 016 ordinary shares 
of no par value as at the dividend declaration date.
- Income tax reference number of Safari: 9012/264/14/0.

Posting of annual report and notice of annual general meeting ("AGM") 
Shareholders of the Company are hereby advised that the Company's Annual 
Report, incorporating the full audited consolidated annual financial 
statements of the Company for the year ended 31 March 2019 and notice of 
the AGM of the Company is currently available on the Company's website,
but is anticipated to be dispatched to shareholders on Friday, 
28 June 2019.

Notice is hereby given that the AGM will be held at 14:00 on Wednesday, 
7 August 2019, at The Corner Office, 410 Lynnwood Road, Lynnwood, 0081, 
Pretoria, to transact the business as set out in the notice of the AGM 
which forms part of the Annual Report.

The date on which shareholders must be recorded as such in the share 
register of the Company to be eligible to vote at the AGM is Friday, 
2 August 2019, with the last day to trade being Tuesday, 30 July 2019.

By order of the Board
24 June 2019

Notice of Annual General Meeting
Notice is hereby given that the annual general meeting of shareholders of Safari
("AGM") will be held at 14:00 on Wednesday, 7 August 2019, at The Corner Office,
410 Lynnwood Road, Lynnwood, 0081, Pretoria.

Corporate information
Safari Investments RSA Limited
(Registration number: 2000/015002/06)
JSE code: SAR
ISIN: ZAE000188280
Country of incorporation: Republic of South Africa (7 July 2000)

Auditors
Deloitte & Touche
Riverwalk Office Park, Block B
41 Matroosberg Road, Ashlea Gardens, Pretoria 0081

Commercial banker
Absa Bank Limited
(Registration number: 1986/004794/06) Absa Towers East
170 Main Street, Johannesburg 2001
PO Box 7735, Johannesburg 2000

Group Company Secretary
Pieter van Niekerk LLB
The Corner Office, 410 Lynnwood Road, Lynnwood, Pretoria, 0081
Postal: As above

Directors of Safari Investments RSA Limited
DC Engelbrecht (Chief executive officer)
FN Khanyile (Independent non-executive)
LL Letlape (Independent non-executive)
M Minnaar (Independent non-executive) 
K Pashiou (Executive)
CR Roberts (Independent non-executive)
JP Snyman (Independent non-executive chairman)
WL Venter (Executive financial director)
AE Wentzel (Lead independent non-executive)

Independent valuer
Mills Fitchet (Tvl) CC
(Registration number CK 89/40464/23)
No 17 Tudor Park, 61 Hillcrest Avenue
Oerder Park, Randburg 2115
PO Box 35345, Northcliff 2115

Legal advisers
Weber Wentzel
90 Rivonia Road, Sandton, Johannesburg, 2196
(PO Box 1144, Johannesburg, 2000)

Sponsor
PSG Capital
(Registration number 1951/002280/06)
1st Floor, Ou Kollege Building
35 Kerk Street, Stellenbosch 7599
PO Box 7403, Stellenbosch 7599

Transfer secretaries 
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647) Rosebank Towers, 
15 Biermann Avenue Rosebank 2196
PO Box 61051, Marshalltown 2107

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